The Thing Is: Andrew Regan

The last time The Independent on Sunday team saw Andrew Regan, the businessman cleared of theft charges last week, he was surrounded by his entrepreneurial friends and a bevy of female beauties.

He was sitting with Michael Basso, who runs clothing supplier Pan World Brands, at the Deloitte & Touche/Indy 100 awards for fast-growing companies in April. Their table rang with raucous laughter. But Mr Regan was quick to ring our office the next morning to assure us he had gone straight home that evening.

The married father of six was understandably edgy, after six years of high-profile controversy involving the theft case, where he was accused of masterminding the corruption of two executives at the Co-operative Wholesale Society. He must rue the day in 1997 that he decided to pursue the audacious £1.6bn bid for CWS, now part of the Co-operative Group which owns the Co-op bank and retail chain. He saw an opportunity to break up the ailing mutual and make a fortune. But the Co-op's private investigators discovered two directors had been meeting Mr Regan illicitly, prompting the collapse of the bid and the Serious Fraud Office probe.

The trial that ended last week was the SFO's third attempt to try Mr Regan for the alleged theft of £2.4m from Hobson, the food supplier he managed, in order to bribe two Co-op executives to secure a lucrative contract for the company. Allan Green and David Chambers are now in prison for each accepting a £1m bribe, and it was alleged by the SFO that Mr Regan knew the money was intended for illicit purposes.

But the SFO failed to convince the jury of this - a jury that had to be given round-the-clock police protection after a mysterious attempt at "nobbling" that had halted the second trial. There is no suggestion Mr Regan was involved, but he endured eight days in Pentonville while police investigated the allegations. There he was "surrounded by drugs" and told not to go into the exercise yard or risk being "done over."

The judge was forced to tell the jury to ignore the impression police protection could give. The jury believed Mr Regan when he said he had thought the £2.4m was a brokerage fee to the intermediary, Israeli businessman Ronald Zimet. Mr Zimet was best known in the UK as chairman of Scoot.com, the internet directory company that soared in the dot-com boom then crashed and burned.

It was Mr Zimet who was the key prosecution witness. He alleged Mr Regan had masterminded the bribery attempt. But he was given immunity if he would testify, and the defence rounded on his credibility as a witness.

The use of such witnesses has been common in SFO trials. For example, in the Guinness case, the company's former finance director, Olivier Roux, a key prosecution witness, was slated by the defence counsel, who alleged that he had made up his story in order to gain immunity from prosecution. Mr Roux denied he had been given any such deal, and the prosecution was in the main successful in the trial.

The method has worked in a false accounting case against the chief executive of oil firm Alliance Resources, but the SFO is likely to review the practice after the expensive failure of the Regan trial. It is estimated it could have to pay two-thirds of the defendant's costs, as much as £2m.

An intriguing question is what he will do with his millions now his name has been cleared. Son of the highly respected Roger Regan, who ran the Spring Ram bathroom company, he made £3m on his 30th birthday when he sold Hobson to Hillsdown Holdings for £121m in 1995. The deal came shortly after he renewed the infamous contract to supply the Co-op.

His spokesman says he is relaxing with family and friends and will take two months before deciding what deals he wants to handle.